The future of indigenous business

There are many indigenous businesses that are caught in the Cashgate scam. Serious questions about ethics and business practice need to be put forward. It is not a question of which business did what transaction, but consequences are much bigger if you look at the wider picture.

Revelations by authorities of lost public finances show that unethical business practices are on the rise. No one can fault the claim that the average business is corrupt, and full of deceit in this country, and operates on the notion of undue profit. President Peter Mutharika talks about patriotism and service to our country.  Nonetheless, these businesses are quick to blame government for any mishaps in their activities. Over the last few years there has been a huge voice from private sector businesses on the importance of empowering local companies to supply goods and services to the government through various channels.

Precisely, I have the vocal nature of the Indigenous Businesspersons Association of Malawi (Ibam) fighting for the rights of their members in my mind, among others. Arguments have been put forward, particularly at the peak of the foreign exchange crisis that foreign businesses externalise money to parent countries.

Along this argument, such groups have justified their warranted claim to government contracts using the externalisation thought. On the other hand, local businesses, presumably, the so-called indigenous have also been caught in the mix of collecting billions of taxpayers’ money without supplying any goods or services. Now get me right. This is open day theft, and sadly, victims are the majority of the indigenous villagers, that such organisations or interest groups claim to care about. It is illegal just as it is for any businesses to externalise foreign exchange without due procedures.

Apparently, I notice that no business group or organisation has come out in the open to condemn the wanton theft and deceit by some of their members that may be implicated in the plunder of the system. I would think that these business groups, before they champion their cause, and indeed claims a fair share of the taxpayer cake, must be at the forefront of championing ethical standards that promote a business culture that is modern and in conformity with the law. It is not just a question of making noise and lobbying government to give tenders, but to sensitise members that fraud, bribery and deceit are not acceptable means of doing business in the 21st century.

Consequences can be dire. Not long ago, the Malawi government got a loan or grant from the Indian government for some projects. Local businesses cried foul since all the companies tasked to undertake the project were Indian. The new hotel in Lilongwe was built by a Chinese loan using a Chinese company. And similarly, the same can be said about the Karonga-Chitipa Road. No local companies were involved.

While many arguments and theories can be put forward, it is clear that in most of the loan negotiations for projects, our bargaining position is at stake and weak. Here we have businesses that can simply claim funds without supplying any goods or service, at some stage seeking to partner a foreign company on a government-loan financed project. It is almost impossible to argue with a development partner that is keen to see a project loan achieve its intended purpose. It is not surprising that some development partners or external financing authorities avoid local companies as partners in some of these projects.  Local businesses are actually shooting themselves in the foot.

While it is politically correct to play a nationalistic tune, one cannot simply ignore the fact fraud, corruption and bribery is bad in indigenous owned businesses just as it is amongst foreign owned businesses. It is therefore, foolhardily to play an indigenous tune to get a government contract and fail to deliver, and get paid. It is even worse, to not have any contract with the government of Malawi, a custodian of all indigenous rights, and still get paid billions of kwachas for doing nothing.  It is not different from any crime under the Malawi penal code.

It is against the law, just as it is illegal to externalise foreign exchange without proper channels, a song sweetly coined by indigenous business groups in their style of playing innocent flower, yet reality has a venomous serpent underneath. n